House Panel Starts Work On GOP Tax Plan

WASHINGTON (AP) — Buffeted by seething differences, members of a key House panel are digging into work on the sweeping GOP tax plan that President Donald Trump and Republicans are counting on to protect their majorities in elections a year from now.

The Ways and Means Committee started debating the proposed legislation on Monday with nearly eight hours of heated argument and accusations. For majority Republicans, the plan would bring needed tax relief to the middle class, kick-start the lagging economy and create jobs. For the Democrats, it’s a tax-cut bounty for big corporations and the wealthy, and a ham-fisted elimination of benefits relied on by middle-class and low-income people.

Late in the day, the panel approved late changes to the bill that were proposed by its chairman, Rep. Kevin Brady of Texas. The revision restored the tax exemption for employees receiving child care benefits from their companies, but also put new requirements on a tax credit used by working people of modest means.

The vote for Brady’s amendment was 24-16 along party lines. That pattern is likely to hold for votes on other possible GOP amendments through the next three days and on the panel’s passage of the bill.

The changes were the first set of revisions to a nearly-$6 trillion plan for the first major revamp of the U.S. tax system in 30 years. Republicans aim to get the complex GOP tax legislation introduced by Thursday and through Congress and to Trump’s desk by Christmas. Trump made overhauling the tax system a campaign pledge and an economic promise.

Committee Democrats repeatedly lodged objections to the bill, especially its limits on prized deductions for homeowners and its repeal of the child adoption credit and the deduction for medical expenses.

Democrats criticized new, tighter requirements in Brady’s amendment for access to the earned income tax credit, including stricter documenting of children and their ages. They insisted it’s a valued tax break for working people of modest income that provides an incentive to remain employed.

Democrats returned repeatedly to a section of the same analysis showing taxes would actually go up beginning in 2023 for some 38 million taxpayers, or families making $20,000 to $40,000 a year.

The committee’s top Democrat, Richard Neal of Massachusetts, said the bill “puts the well-connected first while forcing millions of American families to watch while their taxes go up.” He and other Democrats complained that Republicans crafted it in private without their input.

At stake is whether the GOP will succeed in passing the most sweeping rewrite of the tax code in decades, which would be a major achievement for congressional Republicans and Trump after a year largely devoid of legislative wins. Looking ahead to 2018 midterms, Democrats and Republicans are both trying to win the debate over who best looks out for middle-class Americans.

The legislation would add $1.5 trillion to an already ballooning national debt as it delivers a major tax cut to corporations and repeals the estate tax, which would benefit a tiny percentage of the wealthiest families in the country. It would also simplify the loophole-ridden tax code by collapsing today’s seven personal income tax brackets into four. And it would nearly double the standard deduction used by people who don’t itemize, and increase the child tax credit, an element championed by first daughter Ivanka Trump.

“It’s about making America’s economy stronger than ever by delivering more jobs, fairer taxes and bigger paychecks across the nation,” said Brady.

After embarrassing failures to make good on years of promises to repeal “Obamacare,” the tax bill is enthusiastically backed by Trump, House GOP leaders and many rank-and-file Republicans. They promise a simpler IRS code, a more globally competitive business tax structure, and tax cuts for the middle class and families with children.

But there’s considerable trepidation as well. In addition to the overall increases in later years for lower-income Americans, many earners in the upper-middle class, especially those from high-tax states, are facing tax increases. That’s because the measure would no longer permit taxpayers to deduct state income taxes from their federal taxes.

Powerful lobbyists are fighting to protect favored deductions, while a few well-financed interest groups, including the National Association of Homebuilders, have already vowed to oppose the legislation. The homebuilders group has voiced concerns over Republicans’ decision to lower the mortgage interest deduction from $1 million to $500,000.